Acumatica sale to Vista expected to solidify its cloud ERP
Acumatica's new ownership by Vista Equity Partners should result in increased investment in industry-specific functionality and AI capabilities, while maintaining independence.
Acumatica will soon be under new ownership, as the cloud ERP vendor has entered an agreement to be acquired by Vista Equity Partners.
The deal with EQT, which acquired Acumatica in 2019, is for a reported $2 billion and is expected to be finalized this summer.
The investment firm Vista Equity Partners manages more than $100 billion in assets as of Dec. 31, according to the company. Its portfolio includes several ERP, enterprise collaboration, data and technology-enabled businesses.
Acumatica's cloud ERP is focused on delivering editions for construction, distribution, manufacturing, retail and professional services, as well as a generic General Business Edition, for SMBs.
The deal indicates good growth and health of the market for cloud ERP, particularly in the industries Acumatica targets, said John Case, CEO of Acumatica.
Vista's intent is to let Acumatica continue to run independently and plans no changes in management or company structure, he added.
"Vista wants to buy companies that they think can be standalone leaders in their segment, and that's the way they view us," Case said. "They have a good track record of buying companies and succeeding with them, some of which are currently our partners, like Avalara."
Vista's investment plans in Acumatica are still to be determined to some extent, he said. They will likely include heavy investment in more development of functionality in the industry-specific core ERP editions, as well as capabilities like AI.
"Over five or six years, we might add another standalone vertical or two, but we're not going to do that in the first year," Case said. "It's more about deepening where we are inside manufacturing, construction [and] distribution, and we'll apply the horizontal things like AI, which are critical to our roadmap."
John Case
He noted that while Acumatica and IFS had the same owner since 2019, there was no significant business relationship, despite early promises of complementary synergies.
"There might have been an image that eventually, when customers outgrow Acumatica, they could move up over time to IFS, but we have not seen a customer outgrow Acumatica," Case said. "Other than the fact that we've had a common owner, there's been no business relationship."
More money for R&D and expansion
This looks like a good investment for Vista and a positive development for Acumatica, as there appear to be no major changes and more money for R&D and expansion, said Predrag Jakovljevic, principal industry analyst at Technology Evaluation Centers.
"Overall, a positive move for Acumatica, but we will still have to wait and see," he said.
Vista has done well with managing and selling former portfolio assets like Aptean, BigMachines, Bullhorn, Marketo and SumTotal, Jakovljevic said.
The relationship between Acumatica and its EQT stablemate IFS likely had no role in the sale of Acumatica, he said.
"I think EQT only thought of the IFS and Acumatica synergies for a split second," Jakovljevic said. "They covered different spaces, and they both did well on their own anyway. All those [private equity firms] try to flip their investments and move on to something else after about seven years."
For Acumatica, the investment by Vista should bring access to deeper operational expertise and capital that can support product development, AI capabilities and broader industry reach, said Robert Kramer, vice president and principal analyst at Moor Insights & Strategy.
It gives Acumatica the freedom to stay independent, but with more resources to do so.
Robert KramerVice president and principal analyst, Moor Insights & Strategy
Customers should expect steady improvements to the platform, especially in AI, automation, industry functionality and integrations, without a shift from Acumatica's open architecture or partner-first approach, Kramer said.
The deal fits a current trend that has private equity firms investing more to support focused midmarket ERP providers, he added.
"It gives Acumatica the freedom to stay independent, but with more resources to do so," Kramer said. "The big question is whether they can improve their products and customer experience without making things more complicated or expensive."
Overall, the change in ownership bolsters Acumatica's momentum in the cloud ERP market and suggests that there will be a faster pace of innovation in AI and industry-specific capabilities, he said.
"While any change in ownership introduces some uncertainty, there are no signs that the core product vision or customer experience will suffer," Kramer said. "Instead, most customers can expect deeper investment and more resources for future enhancements."
Jim O'Donnell is a news director for Informa TechTarget who covers ERP and other enterprise applications.
John Case
